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Our game plan to get BDS back to high single-digit margins by the '25, '26 time frame remains unchanged.
bds 2025/2026 aim
Transcript
2023 Q4
1 Feb 24
On the 737, we delivered 110 airplanes in the quarter and 45 in December. The program also began FAA certification flight testing on the 737-10 in December.
For the year, we delivered 396 airplanes, on the upper end of the revised guidance range we provided in October. Per the FAA announcement, we'll maintain production at 38 per month and work transparently with the FAA to complete all requirements for future increases. At the same time, we'll continue to prioritize the master schedule to avoid disruption in our supply chain.
737 deliveries
Transcript
2023 Q4
1 Feb 24
Now is not the time for that. We won't predict timing. We won't get ahead of our regulator.
We will go slow to go fast
difference to muilembretg
Transcript
2023 Q4
1 Feb 24
Today, we're producing 737s at a rate of 38 per month.
737 at 38 a month
Transcript
2023 Q4
1 Feb 24
Our team has worked diligently to help our customers restore their 737-9 airplanes to service. The FAA approved the detailed inspection protocol last Wednesday. And today, all 737-9 operators are safely returning their airplanes in service.
all 737-9 back in service
Transcript
2023 Q4
1 Feb 24
n the case of BDS, even though it might be a bit different than we had thought even a year ago, it's still within the quantum of us being able to deliver that $10 billion. And we have a lot of confidence that they will be contributing to that $10 billion, maybe not quite as much, but they're going to be positive.
And of course, BGS remains strong. BCA, we have more and more confidence.
So we still have a path to that $10 billion and just reinforce how confident we are in being able to get the whole enterprise there.
10bn in 2025? bds will contrinute less than previously thought
Transcript
2023 Q3
31 Oct 23
Of course, we'll be more specific in January on next year's free cash flow guidance. But we expect to be higher. It's too early to be that specific, but it will be underwritten by higher BCA deliveries, both on the 37 and the 87. We'll have made progress on the inventory wind down that Dave mentioned. And we're also going to factor in the 777X ramp.
expect fcf to be higher in 2024
Transcript
2023 Q3
31 Oct 23
And even in these last just several months with the nonconformance issues that have sort of constrained our delivery, as we've said many times, we have kept our master schedule intact to get to that 38. We're definitely building inventory in the process, and we're paying our suppliers.
still structured for the 38
Transcript
2023 Q3
31 Oct 23
we had thought you'd be at 38 a month production back in August, and we were looking forward to a new line that should be up and running at Everett in 2025, which looks to us that will give you capacity for well over 60 a month. But now that 38 a month rate is coming -- is still to come later this year.
38 a month v late
Transcript
2023 Q3
31 Oct 23
I've heard from a few of you wondering if we've lost a step in this recovery.
You might not be surprised to hear that I view it as exactly the opposite.
?????
Transcript
2023 Q3
31 Oct 23
On 4Q specifically, we expect BCA margins to improve sequentially but remain negative, more in line with 2Q, and we're still not anticipating much in terms of BDS profitability.
Q4 guide -- bca mgn negatve, not much on bds
Transcript
2023 Q3
31 Oct 23
including $3 billion to $5 billion of free cash flow generation, although updated 737 deliveries now point more towards the low end of the free cash flow range.
We also expect R&D to come in slightly above our original guide tied to the higher 777X investments that I touched on earlier.
low enf of FCF rangs of 3-5 bn
Transcript
2023 Q3
31 Oct 23
Lastly, we have our large fixed price development programs that represent the remaining 15% of the portfolio, and we continue to be focused on maturing and retiring these risks.
Specifically, on the KC-46A program, we're stabilizing the production system. We've seen signs of progress and improved productivity. And as of this month, we have delivered 77 tankers to the customer.
For the VC-25B, we're now maturing through the build process. And the key milestones ahead are power on and first flight, both of which will essentially be behind us as we move through the '25, '26 time frame and represent a significant derisking of the program.
For commercial crew, while it has been a long road, we're preparing to execute a successful crewed flight test next year and then fulfill operational launch commitments, all of which will be completed as we exit '25, '26. On T-7A, we just delivered the first aircraft for the Air Force this quarter and have begun critical phases of the flight test program.
On MQ-25, we'll get through key build and flight test milestones and transition out of the development phase as we move through the '25, '26 time frame. We remain very confident in the T-7A and MQ-25 investments that will deliver innovative performance to the customer with a strong long-term demand profile.
color on the problematoc 15%
Transcript
2023 Q3
31 Oct 23
we have a solid core business representing about 60% of our revenue that performs in the mid- to high single-digit margin range.
60% of bds ok, msd to hsd margins
Transcript
2023 Q3
31 Oct 23
This performance is below our expectations, and we acknowledge that we aren't as far along in this recovery as we expected to be at this stage.
ackhowledge bds is behind
Transcript
2023 Q3
31 Oct 23
In early September, we indicated that margins would be around minus 9%, the driver being a $482 million charge on VC-25B fixed price development program due to higher estimated manufacturing costs related to engineering changes, labor instability and the resolution of supplier negotiations.
As we closed the books at quarter end, we saw another 8 points of margin erosion driven by, first, a $315 million loss tied to customer considerations and higher estimated costs to deliver a highly innovative satellite constellation contract that we signed several years ago; and second, we had smaller less material cost pressures across a couple of programs totaling $136 million primarily driven by the MQ-25 program.
Defense charges disappointing,
Transcript
2023 Q3
31 Oct 23
pirit on commercial terms associated with the 737 and 787 programs. We believe this agreement is a win-win for both companies and directly promotes our goal to drive stability and support our airline customers.
spirit deal adds stabiloty and derisks
Transcript
2023 Q3
31 Oct 23
We still expect most of the MAX inventory aircraft to be delivered by the end of 2024 but more are likely to slip into 2025 tied to the fuselage recovery.
most MAX in invent9ry to be delibered by 2024 end
Transcript
2023 Q3
31 Oct 23
Since our early September update, additional areas of the aft pressure bulkhead were identified that require further inspection and rework, which you likely read about.
This additional scope impacts units that had already gone through the initial rework and will take us more time to stabilize production and deliveries. We founded the issue, understand the rework steps required and booked a nonmaterial financial impact in the quarter.
Considering these latest facts, we expect October deliveries to be in line with September and now expect to deliver between 375 and 400 airplanes for the year. Performance ultimately will be dictated by the pace of a fuselage recovery.
october deliveirs will be in line with september , so lowered FY guidance
Transcript
2023 Q3
31 Oct 23
With that, I'll turn to the next page and cover Boeing Commercial Airplanes. BCA booked 398 net orders in the quarter, including 150 MAX-10s for Ryanair, 50 87s for United and 39 87s for Saudi Arabian Airlines. BCA now has over 5,100 airplanes in the backlog valued at $392 billion.
bca backlog
Transcript
2023 Q3
31 Oct 23